What Are You Buying?

The market appears a bit frothy right now. The Dow Jones Industrial Average is currently north of 13,000 points, while the S&P 500 treads just above 1,400 points. But, as I’ve stated many times before I believe in purchasing high quality equities at attractive long-term prices on a regular basis. I believe that there are stocks trading for more attractive valuations than the market as whole at almost any given time and I make it a priority to seek out quality on sale.

I try to look at the big picture and stay dedicated to my plan, which involves living well below my means and using excess capital to purchase stocks on a monthly basis. And as another month approaches I’m starting to fill out my shopping list. As the great Warren Buffett likes to say: my trigger finger is getting itchy. I don’t have an elephant gun, but my little pistol will still get the job done!

It’s been a while since I asked you readers about your watch lists and what you’re interested in buying. I haven’t been as active in the market as I usually am over the last couple months while I took a breather from blogging and investing in general. The break has given me two wonderful things: renewed focus and a little extra cash. Sweet!

Here’s a short list of some equities I’m considering purchasing in early September:

Kinder Morgan Inc (KMI)

Per Morningstar:

Kinder Morgan Inc. owns the general partner, incentive distribution rights, and an approximate 11% interest in the limited partner units outstanding of Kinder Morgan Energy Partners. It also owns a 20% stake in NGPL, a major interstate natural gas pipeline. 

I’ve looked at Kinder Morgan before and I like it just as much as I did back then, except now it’s more expensive unfortunately. KMI is a great way to get into the MLP field and get your hands on infrastructure and energy storage/transportation without having to worry about excess tax consequences. I like the higher than average yield at 3.95% and the higher than average dividend growth. KMI has more than doubled its dividend from April of 2011 (the first dividend after it went public) to now, going from $0.14 per share quarterly to the current $0.35 per share payout. That’s a 157% increase in just over a year!

The key driver behind KMI’s allure as an investment is the IDR (incentive distribution rights) it receives as the general partner in the massive Kinder Morgan Energy Partners Master Limited Partnership. This IDR gives the general partner an increasing piece of the ever-growing pie that KMP has. If you believe Kinder Morgan Energy Partners (KMP) will be very profitable for the foreseeable future, KMI is a great way to invest in the infrastructure without tax consequences and also with higher dividend growth due to the IDR. I think KMI is slightly undervalued at the current price of $35.44. If KMI doesn’t rapidly increase in cost, I’m a buyer.

Leggett & Platt, Inc. (LEG)

Per Morningstar:

Leggett & Platt engineers components and products for a variety of uses. Its springs and spring units are used in bedding and chairs. The company also makes headboards, die-cast products for barbecue grills and lighting fixtures, and store displays and shelving. Its Specialized Products segment offers machinery, manufacturing equipment, automotive seating suspensions, control cable systems, and lumbar supports. 

You know, I’ve never been a huge fan of LEG as a company.  I find the lack of growth troubling and I’ve seen no significant catalyst, or change, for that to change in the near future. It’s traded at an elevated valuation for a while now, which hasn’t helped my opinion. However, I recently re-read Dividend Monk’s stock analysis on this company and he may have made a believer out of me, however small. I do like some things about this company. First, it’s boring and reliable. It’s also easy to understand. I understand springs, beds, shelving and all that it comes with. I can see why people will continue to need these products far into the future, as they have for the last century or so. Man does enjoy a comfortable bed!

The entry yield of 4.89% is pretty enticing, and I’ve been considering upping my overall portfolio yield of late. The P/E ratio is currently at 21.52, so this stock would have to come down a bit before I’d consider making a purchase. Matt thinks larger growth prospects are ahead for this company, so it could allow for earnings expansion and bringing down the valuation. I’m watching this one. It does have a 40-year dividend growth streak going, albeit with very low growth over the last few years. The payout ratio exceeds 100% using earnings, which is a warning sign, but the dividend is well covered by FCF.

General Dynamics (GD)

Per Morningstar:

Falls Church, Va.-based General Dynamics manufactures ships, armored vehicles, defense-oriented information technology systems, and business jets. The firm gets around 72% of revenue from the Department of Defense, and the rest from foreign sales and Gulfstream business jets. In 2011, the firm generated $32.7 billion in sales and $2.4 billion in earnings with the help of 93,500 employees.

I think GD is attractively valued at today’s price of $65.85. The entry yield of 3.10% is very nice and the 21-year dividend growth streak is in no danger of abating anytime soon. GD has a 10-year DGR of 12.8% and it’s showing no real signs of slowing. The payout ratio currently stands at 29.7%, which allows for plenty of expansion in the dividend even without much earnings growth. Fantastic! The current P/E ratio of 9.61 is priced right for me. The debt/equity ratio is currently at 0.2, and the balance sheet is very well managed.

Qualitatively, I like the business. It’s easy to understand and fairly diversified between aerospace, combat systems, technology and information and marine. Although the large revenue base from the DOD is a bit concerning, I’ve always believed that there will be continuing need for defense and a strong military. Human nature, and the conflict involved in such, ensures this unfortunately. The price is attractive and the business makes products that continue to be in demand. I’m currently long GD for a price just below what it’s currently trading for, so I’m interested in adding to my position if the price stays static or dips slightly.

These are just a few quality dividend growth stocks I’m interested in. I would add ADM to the mix as I think there’s a lot of value there. The drought impacts remain to be seen, however. Also the health care has some value in MDT and BDX currently.

What about you? What are you buying?

Full Disclosure: Long GD, MDT

Thanks for reading.

Photo Credit: Free Digitial Photos

Comments

  1. Bo says

    My last buy was in may. I’ve builded up quite a big cash position now and wanna buy something too.

    To me ARLP, ADM, BDX and GD look good value right now. KO has been dipping the last couple of days and I am willing to initiate a position around $33-$34.

    Also, MCD looks good, but I already have quite a large position in MCD.

    Take care!

    • says

      Bo,

      I don’t follow ARLP, but ADM, BDX and GD are all solid values right now. KO has been weak since the split and I’d follow your lead with a purchase at the $33-$34 level ($66-68 pre-split price). I’d even consider KO at $35 ($70 pre-split). We’ll see if the weakness continues, because KO is a company I love to own a piece of and it’s a rather small position for me currently.

      MCD also looks very good at these prices. I’d buy more if it dips down to $85 or so.

      Best wishes!

  2. Anonymous says

    Hi,
    I confess I already have GD, KMI, and LEG. Im looking to add RTN and maybe TE as my next purchases in the next month or two.

    • says

      Anonymous,

      Thanks for stopping by.

      I see you already own some solid names there. KMI looks very interesting to me. The IDR is set up to be very profitable, indeed.

      I’ve followed TE before, but I haven’t had my eye on it in a while. I’ll have to take another look. RTN is somewhat similar to GD in terms of metrics, but without some of the diversification away from the DOD, as the DOD accounts for a larger percentage of revenues for RTN. Still a solid company, but I would prefer GD at today’s prices.

      Best wishes!

  3. fiveoh says

    Just added a small amount to my intc position. It has been dropping lately bc of weakness in the field not related to Intel. (my opinion) There are high valuations on most of the DG stocks I follow. I’m watching WAG and AFL to add to if they pull back some.

    • says

      fiveoh,

      INTC looks interesting here. I didn’t add it to my list above, but I am following. If it falls below $24 it will rise to the top of the list. I already have a fairly large position size in INTC, so I don’t want to go crazy..but it does appear to be pretty cheap right here.

      AFL is also cheap. I bought mine after the tsunami hit, but I still think it’s a good value. I don’t follow WAG much because of the intense competition in the pharmacy space but I know a lot of people love that name.

      Take care!

  4. Robert says

    GD looks very tempting. Over 3% yield. Dividend growth rate is over 10% for 1, 3, 5 and 10 years. Payout ratio is a hair under 30% and the increase streak is 21 years. Plus their net earnings have been growing at a decent rate (6% annually the last 5 years, estimated 7% annually for the next 5). All signs that the company can continue to increase dividends for quite a while.

    The one thing that concerns me (and concerns me a lot) is the risk that the politicians in Washington won’t get their act together before the so-called “Fiscal Cliff” sets in after New Year’s. I know that all of the pundits are convinced that Congress will get serious after the election and deal with this issue, but I question Congress’ ability to do little in the way of anything productive these days.

    If the automatic cuts go forward as scheduled, GD and the other defense contractors will take a huge beating. While I think many of the big ticket projects won’t necessarily be abandoned, they will be delayed or spaced out, hitting GD’s cash flow and profits very hard.

    As much as I’d love to add this stock to my small but growing portfolio, I can’t seriously consider buying until after the government resolves this issue or the cuts take effect. As tempting as GD is, I’d rather be kicking myself in February after it runs up because Congress has actually fixed something for change than be selling the stock for pennies on the dollar because GD’s looking at freezing or cutting the dividend and the stock has tanked at the same time.

    I have too much faith in Congress’ ability to snatch defeat from the jaws of victory. :)

    • says

      Robert,

      You pointed out a number of quantitative reasons I love GD. Solid company, great fundamentals and a great dividend growth stock. It’s valued attractively and should provide solid returns at today’s prices.

      However, it’s hard to say what will happen in the political arena. Because I lack the ability to predict that kind of stuff I try to buy with a margin of safety and play it conservatively. I think today’s prices have a margin of safety built in, even if DOD cuts kick in. If the cuts do happen, the market will punish these stocks and I’ll buy them even cheaper. I think they will be able to deal with cuts and still keep paying a dividend.

      We’ll see!

      Take care.

  5. says

    Picked up some Coca Cola (NYSE:KO) for the first time, plan on adding more to the position over time. Since the stock split, it’s been on a bit of a down turn, which to me is a perfect buying opportunity.

    I hit my 2012 dividend goal already (goal was 25% increase over last years dividends, I’m on track for over 50%) so I’m starting to get more defensive with the remainder of the year. I took some big risks that paid off, but I’d rather not have to do that all the time :)

    • says

      Neu,

      KO is a great company. One of the must-own names for a DG investor, in my opinion. If it continues to fall I do plan on adding to my position.

      Great to see you’re blowing away your own personal goals. That’s always wonderful to hear. Setting ambitious, but realistic, goals and then skyrocketing past them is a fantastic feeling. Keep up the great work.

      Best wishes.

    • says

      Nuno,

      Best of luck with that name. I don’t really follow any REIT’s right now as I’m still filling out the portfolio with C-corps. I’m starting to slowly get interested in the MLP/infrastructure space and KMI will be my transition into that space. REIT’s may eventually be next. I hope that investment works out great for you! Stay in touch.

      Take care!

  6. says

    Although I already own it, and got in at around $9, Permian Basin Trust, another MLP has taken a huge hit due to a dividend cut. Their dividend is however based largely on fuel prices and monthly production and regularly goes up an down. Even at the current price it yields over 6%. Also, I am currently watching Intel and although it looks cheap currently I am waiting for it to get below $24 before pulling the trigger.

    • says

      Gutierrez012,

      Thanks for stopping by.

      I don’t follow Permian Basin Trust personally, so I can’t really comment on that one. INTC does look very interesting and I’m absolutely in agreement on pulling the trigger below $24. I’d be a buyer at those levels as well. I already have a fairly large sized position, but I wouldn’t mind conservatively adding to it.

      Best wishes!

    • says

      Everyday Freethought,

      I’m not a fan of CINF personally. The lack of growth and high payout ratio, as you describe, are the primary reasons. Just not a name I’d like to own unless they start growing again.

      MMM is a solid company. I haven’t watched that one in a little while. I remember looking at it when it was in the mid-$70′s and almost pulled the trigger. It’s had quite a run since then. Still, one of the best companies around.

      Thanks for stopping by.

      Take care.

  7. says

    I agree with your statement about there always being stocks with better valuations than the market. In addition to my watch list I will look at positions in my portfolio that haven’t performed as well as the market and if their fundamentals haven’t changed they could present a good buying opportunity. That said, INTC and BDX are high on my list. I’m sorta planning on another fall correction. If it comes there should be plenty of good buys. We shall see.

    • says

      I agree on both fronts about there always being some kind of sale going on and a fall correction. Unfortunately some of the companies I’d really like to get into aren’t on sale right now. Although I am really close to starting a position in Harris. I just wish I had done it earlier this year when it was much cheaper. Along the lines of there always being sales, I’m torn on whether it’s better to buy what’s on sale or add more to the most undervalued current position. I don’t want my portfolio to get too large that keeping up to date on the companies is a full time job. Although with my current job I do have the luxury of that time to do it on their dime.

    • says

      Not sure what happened to my previous reply. So here it is again.

      I’m agree on both fronts, about there always being something on sale and that we can probably expect a correction come Sept/Oct. I’m torn on whether it’s better to always buy what’s on sale and start a new position or add to the most undervalued stock that I currently own. I don’t want my portfolio to get so big that it’s a full time job to keep up with it. Luckily with my current job I can stay up to date on all the companies during the work day so it’s nice. I was thinking of starting a position in HRS this morning, I just wish I would have pulled the trigger a few months back when it was much cheaper. A second dividend increase this year is awesome. I think they’re creeping up to the top of the list if their price will just come down.

    • says

      austinbroker,

      I hope you’re correct about that fall correction. We may get some movement tomorrow depending on what The Fed announces about possible further easing. I hope the market continues the slide!

      BDX and INTC are both interesting here. I’d be interested in INTC below $24 and BDX below $73. Both are solid companies with wonderful fundamentals and a long track record of strong profitability. BDX is definitely a company I’d like to be invested in sooner or later.

      Best wishes.

    • says

      Passive Income Pursuit,

      I’m sorry about your comments. They were put into the spam box for some strange reason? I promptly changed that as soon as I got home from work.

      Great mention of HRS there! I’m very glad I purchased HRS when I did. A 12% dividend raise is wonderful, but being the second one in 6 months is even better! Fantastic investment so far. And, it’s still relatively cheap. I wouldn’t mind increasing my stake, but it’s trading for quite a bit more than what I bought it at originally.

      Best regards.

    • says

      Squeezer,

      I don’t follow REIT’s in general very closely right now as I’m still investing in a lot of attractive companies that are built on the good old fashioned C-corp structure. REIT’s may eventually fall into the Freedom Fund as the outsized yield is attractive!

      Best wishes.

  8. Chad says

    My short list for my next purchase is MCD, EMR, or HAS. MCD under $89 looks really good to me. Will be hard to pass it up come mid Sept when I plan on having enough to make my next purchase.

    • says

      Chad,

      All very solid names there. HRS in particular is still cheap even after a strong run. I’d be adding to MCD at these levels if I didn’t just buy more a couple weeks ago. If it falls below $85 I’ll purchase more.

      EMR is a solid value. I bought more this summer around $45 and I’m glad I did. Anytime it falls to that level I’m a buyer. You gotta love owning a stock that Ben Graham mentions in The Intelligent Investor.

      Best wishes!

    • says

      CI,

      Solid names there. I’m with you on KO if it falls further. $34 or so would be a great strike price. The weakness after the split may provide an excellent opportunity.

      The other names are all attractive right now. MCD was my most recent purchase so I won’t buy again unless it dips significantly, but INTC is becoming very, very attractive.

      Can’t wait to see what you buy!

      Best regards.

  9. says

    Well my replies keep disappearing so probably in a few hours there’s going to be 2 replies. Let’s try a comment this time.

    I’m agree on both fronts, about there always being something on sale and that we can probably expect a correction come Sept/Oct. I’m torn on whether it’s better to always buy what’s on sale and start a new position or add to the most undervalued stock that I currently own. I don’t want my portfolio to get so big that it’s a full time job to keep up with it. Luckily with my current job I can stay up to date on all the companies during the work day so it’s nice. I was thinking of starting a position in HRS this morning, I just wish I would have pulled the trigger a few months back when it was much cheaper. A second dividend increase this year is awesome. I think they’re creeping up to the top of the list if their price will just come down.

  10. Adam says

    WAG, AFL, DOV, INTC, MCD have looked good recently. Also interested in CVX in the low 100′s if it dips back there.

    • says

      Adam,

      All great names there. I should follow DOV more than I do. A solid company right there. I’d also be interested in CVX if it dips below $100. I’ve bought CVX multiple times when it’s dipped below triple digits.

      AFL is a strong value play right now. If it wasn’t already such a large position I’d be buying more. Heck, I might anyway! Solid company and a great price. Gotta love that!

      Thanks for stopping by!

      Best regards.

    • Adam says

      Mantra,

      Good to see you back posting. Yeah, I started a position in AFL around 40 in June with the intent to load up. It basically went up a little bit everyday since then so I haven’t bought more, but now I wish I had. That’s the way it goes sometimes.

      As far as GD, I think it looks good but I already own as much as I feel comfortable with.

  11. says

    I’m liking McDonald’s, Aflac, Emerson, Chubb, Republic Services, Waste Management, and several others at current prices.

    As for LEG, I think a decent entry point is when it’s at 5% yield or better. I own it and wrote some covered calls on my position to increase the income a bit.

    • says

      Dividend Monk,

      Thanks for stopping by. Always appreciate your opinion, as you know.

      I like your ideas. RSG and WM are interesting. I think if I were to own something in the trash space I’d like to own both and hedge my bets (like KO and PEP in the beverage/snack space). I’ve never been a huge fan of WM’s fundamentals but the annuity like revenue stream is appealing. I think it’s a name I’ll own sooner or later, along with RSG to compliment it.

      MCD, AFL, EMR and CB are also attractive currently. CB has been a great winner for you. MCD was a recent purchase for me, but AFL is very interesting even as it climbs near $50.

      INTC is also getting cheap again.

      Best wishes!

  12. says

    I like MCD and HRS but I need the prices to come down a bit. I think HRS is towards the top of my list with 2 dividends increases in the past year. I just wish id have pulled the trigger when I did my stock analysis and it was much cheaper. Would be looking at around a 4% yoc. I’m hoping a no qe announcement tomorrow will give us a dip tomorrow to let me buy some.

    • says

      There’s all my comments. I knew something was up bc they showed up when I posted them but then disappeared on a refresh.Of course now it looks like spam since there’s 4 of them. I hope tomorrow is the start of a correction. Lets go Bernanke, shake the markets up.I might have to check on the put option premiums bc HRS might not be coming down unless the market sells off. Happy shopping!!

  13. says

    I’m also itching to deploy some cash and would like to do so in September.

    Among the stocks already in my portfolio, I am considering possible additions to ADM, GD, HRL, JNJ, and MCD. I’ve noticed the decline in KO lately, but it would have to drop below $35 before I would give serious consideration to a purchase. I would also consider making a small addition to my GIS position at or below $38.

    As for potential new additions to my portfolio, I am watching several stocks, including INTC and RTN. I have looked at KMI from time to time, but I’m not sure how to value it — what suggests to you that it is slightly undervalued? Valuation aside, I agree that it looks like a great stock for getting into the energy infrastructure/pipeline area.

    I look forward to hearing what you decide to purchase. Hopefully we both make some great purchases in September!

    • says

      DGM,

      Thanks for stopping by. So your elephant gun is loaded too? :)

      I like your picks there. ADM, GD and MCD have a lot of value currently. I’m with you on purchasing KO if it drops down to $35 or so ($70 pre-split).

      As far as GIS, I’ve looked at it a few times and considered purchasing. I keep passing on it, and the reason(s) why escape me right now.

      I’d go with INTC over RTN. RTN below $50 looks great, but it is a very solid company with great metrics. INTC keeps falling and looks attractive right now.

      I valued KMI using the DDM model (using the spreadsheet provided by Matt). Using a 9% dividend growth rate and a 12% discount rate I got a fair value of ~$50. Even using a higher discount rate I still get a fair value closer to Morningstar’s $38, which is still 10% higher than the current price. KMI is currently at the top of my list. I’d be willing to buy all the way up to the mid-$40′s.

      I look forward to seeing what you purchase as well. I’m hoping for a drop after the Fed meeting tomorrow that carries weakness into September. I should receive a commission check in the first week of next month so I could have a significant amount of cash ($4k or more) to make buys with. No elephant gun, but I’m still happy to go hunting!

      Best regards.

    • says

      Thanks for your response. Regarding specific stocks:

      GIS: I consider it to be a solid company among consumer staples. It has consistent growth, strong brand names, and seems to be well-managed. There is plenty of room for growth in developing countries, especially as breakfast becomes a more important meal in some places. The yield and dividend growth are pretty good and the company has never reduced its dividend in 113 years. The main negative is their balance sheet, which is mediocre but not worrisome.

      INTC: I have been doing some due diligence lately and I think I’m gradually overcoming my concerns about buying a tech company. While there are always risks related to keeping up with the latest technological advances, I think Intel’s R&D will keep them in play for quite some time. There is concern about their lack of penetration in the mobile market, but I don’t think the challenge is insurmountable for a company of its stature. To put a positive spin on it, given that they don’t have much market share in that area yet, it represents an avenue for growth. Intel is one of the few tech companies that seems like a good investment, especially around the current valuation.

      KMI: Your post made me look more closely at the company and I am liking what I see. The corporate structure is a bit complicated, but I think I have a basic understanding of how it’s organized. I like the strong insider ownership and management seems very committed to growing the dividend. The company has established a large moat and economy of scale, especially with the recent El Paso deal. I have been wanting to increase my exposure in the energy sector (all I have is CVX right now) and KMI might be a good addition to my portfolio. Thanks for putting it on my radar.

      As for the market more generally, I was disappointed by the reaction to Bernanke’s speech. He didn’t really say anything he hasn’t said before, so even though the Fed is “ready to act,” I thought there might be a sell-off due to no immediate action being announced. Sigh. Maybe there will be some news out of Europe that will upset the market and create some nice dips for us! :)

    • says

      DGM,

      Thanks for writing back.

      I’ll have to take another look at GIS. It’s on my watch list that I keep active on my brokerage account but my eyes always manage to look past it. I like your thoughts on breakfast becoming a more important meal in other countries. It has a solid portfolio of brands.

      Glad I put KMI on your radar. The MLP structure (as Matt points out in his recent e-book) is primarily built to provide value back to the owners and unit holders. Sounds good to me. I’ve always been a little hesitant to diversify out of standard corporate structures and get into MLP’s, REIT’s and such. KMI represents some middle ground (GP of the MLP), along with higher growth from the GP. REIT’s may be next. I’m currently looking at SNH.

      Ben’s openness and willingness to provide further liquidity is what I believe allowed the market to drive higher. He was no less opaque than usual, but perhaps that gives people hope for further help. Personally, I’d like to see the Market off on its own with no training wheels and let the chips fall where they may. Value investors like us would do well in that scenario.

      Best regards!

    • says

      DGM,

      Thanks for bringing that article to my attention. I agree with the author, and you, in that GIS is not of extreme value right now, but considering the lack of value in the dividend growth stock space, GIS represents a pretty decent place to store long-term capital right now. Certainly not a bad pick at today’s prices. It’s currently on my watch list and I’ll have to continue to monitor it closely. It seems like $38 is a good price to pick it up at. It’s definitely a company I’d like to own at some point.

      Best wishes!

  14. Anonymous says

    I am fairly new to dividend investing. I started investing June 2011. I own a small position in KO(pre-split). Do you think reason for some weakness in KO after split could be attributed to the fact that now it’s half the pre-split price and hence has become more prone to fluctuations. What do you think?

    • says

      Anonymous,

      Thanks for stopping by. Welcome to the investing world. Congratulations on taking control of your financial future!

      Great question.

      I think the weakness in KO is due to a couple of factors. First, the run-up in KO came with a general market run-up and was compounded when the stock split talk started. When it was approved, I think some investors bid up the price to get in before the share count doubled. I think the weakness you see now is due to the high valuation of KO relative to the market. It’s still an expensive name, even for the high quality company that is Coca-Cola. You see the valuation so high because it’s a flight to safety-KO is an extremely defensive blue chip stock.

      I think it may come back down to $35, which is a fair price and I’d be willing to double my position at that price. KO is a relatively small position for me because it was one of my earliest purchases and I bought in the low $50′s (pre-split).

      I hope that helps. Just my opinion on it.

      Best wishes!

  15. Westphalian says

    Hi DM, great to have you back, I missed your blog!

    On topic: I’d like to add GIS to my portfolio but I’m waiting for a yield of 3.5%.
    I think it’s a good conservative and stable dividend stock.

    Greets from Germany and best regards.

    • says

      Westphalian,

      Thanks for stopping by. I’m glad that you still have time to visit and comment.

      GIS looks pretty solid. As mentioned above I have followed it for quite a while, but have passed on a number of occasions for reasons that I don’t remember. 3.5% entry yield seems like a great target…and it wouldn’t take much of a fall to get there. Stay in touch.

      Best wishes!

  16. Anonymous says

    Hi.
    I have been looking at SWY, and recently bought some shs. Safeway has raised their dividend by 20% in each of the past 5 years (starting in 2008), and by 16% and 19% in each of 2006, 2007. Recently their share price has been off, but that’s made a situation where their divy is around 4.5% right now. I shop at swy for my groceries, and I think their new “just for you” program might help them streamline their business, or at least keep people coming back.

    • says

      Anonymous,

      I don’t personally follow either of those businesses, but I do hope they work out fantastic for you. SWY has been raising that dividend like crazy. That’s quite a recent history.

      I know grocery stores typically have low profit margins, but if you feel there’s solid value there and they have something that keeps clients coming back then great.

      Best wishes!

  17. says

    Could you please clarify your comments about KMI regarding “excess tax consequences”? Does this mean KMI doesn’t issue K-1 forms or report income/dividends on anything other than a 1099-DIV?

    I’ve been turned off of all MLPs because for now I want to keep tax reporting as straightforward as possible.

    • says

      The Executioner,

      I’m sorry if my thoughts on KMI came across as confusing. I only meant dealing with a K-1 as excess tax consequences. For some, this might not be true. I suppose it depends on your tax expertise or whether or not you have an accountant.

      I’m with you on keeping taxes as straightforward as possible. That’s also why I’ve been avoiding MLP’s. KMI seems like a great way to get the best of both worlds.

      Best regards.

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